In a previous piece, I wrote on how the economy and the environment are inseparable and how developing a new clean energy based economy is a huge economic development opportunity. I feel an obligation that if I’m going to “talk the talk”; I need to “walk the walk”. To that end, I have recently completed a project to transition one small slice of the world -- my home -- to new clean energy. I was hopeful that the anticipated benefits will actually be realized.

As someone deeply concerned about the environment, but more importantly, a parent and grandparent, my motivation for transitioning my home to solar generated electricity is that it is the right thing to do. I used to believe that I would need to spend a lot to do this and perhaps never see a breakeven point. But I couldn’t place a price on my children’s future. Yes, I was also feeling guilty. As an American I am among the worst CO2 emitters on the planet. My children already face the prospect of a massive clean up and a difficult adaptation to climate change. This is now a certainty. The only question is how much. In fact, I’m surprised young people are not more vocal and actively in the streets and in the voting booths over this burden they face.

So I solicited bids for a Solar Photovoltaic (PV) system. Basically, solar options consist of solar panels (PV) that will generate electricity and thermal solar panels for heating water. I just went with a PV system. A great 4 minute video primer on solar can be viewed at http://www.teachersdomain.org/resource/oer09.sci.ess.watcyc.solarhome/.

As with any home improvement project, it is recommended that you take the basic precautions of selecting your contractor carefully and thoroughly educating yourself before signing on the dotted line. Thankfully there are several reputable and experienced firms available these days. So the criteria I used in selecting the supplier were the following:

1.The system should be properly designed to fit my site and to maximize benefits to me.

2.All equipment should be from a reputable manufacturer and must qualify as “Manufactured in USA”.

3.I should be given plenty of hand-holding throughout the project including details of the process required for interconnections, permitting, and renewable energy credit generation and sale.

4.The supplier should have the adequate experience and good references.

5.The pricing should be competitive (though it need not be the lowest).

While I feel every contractor I accepted bids from could have done the job and done it well, only one company fit all my criteria. This was a very important indication to me that they listened to and understood all my concerns and that they wanted to supply me with what I wanted rather than with what they wanted. This is Sales 101 but so often such a rare experience.

Here is a description of my system. Before I called in the first contractor, I read up on solar systems and the basic building blocks of such a system as well as took a class. They are not terribly complex but there are some different options to consider. I’m not going to cover this in detail. Simply put, the system consists of collectors (there are different options here both is size and design), inverters (collectors generate DC electricity that needs to be converted to AC, again a couple options to consider), mounting hardware, wiring and conduits. I also added a communications gateway so that I could see the output of my system via an ethernet connection to my PC and to a website for remote monitoring and analysis. All in all it is pretty basic. The big decision is how many panels and where to locate them on your home or property.

I’m fortunate to have a home that is well suited for solar. The back faces straight south, there is little shading, and there is enough roof space to accommodate my needs (for picture visit http://illinois.sierraclub.org/NWCook/Past_Articles/articles_Economy_Environment2.html). Occasionally you hear complaints about the aesthetics of a solar system. Judge for yourself. I think it looks good and better than 2 or 3 satellite TV dishes hanging on the house.

My system consists of twenty eight 240 watt panels with micro inverters (one inverter per panel rather than one inverter for the entire array). So, total output is 6.72 kilowatts. This is a pretty good size system for a home. But my home is some 4,000 square feet and I have been averaging about 900 kilowatt hours per month. The system should deliver about 80% of my current demand. I under-sized the system for 2 reasons. First, I believe I can continue to reduce my electricity consumption through efficiency measures and second, and this is unfortunate, net metering rules will not compensate me for electricity I produce in excess of what I use. What is net metering? In simplest terms, when I generate electricity and don’t use it I will feed it to the grid and my meter will go backwards. When I call for electricity in excess of what I am producing, like at night, my meter will run forward. I pay the net difference, if there is one, at the end of the month. If I have delivered more than I have used, these credits roll over to the next month. But here is the kicker, at the end of a 12 month period, the rolling over stops and I start from zero again. So I have no incentive to produce more than I will use in a year since this would just mean providing free energy to a utility which will then sell it at full value. Fortunately, there is state legislation pending to remedy this limitation.

Another consideration is obtaining a building permit from the town. Here requirements and costs can vary.In Palatine ILonly requires a standard building permit and it cost me $428. The permit required that I submit engineering calculations verifying that my roof will support the weight of the system. An engineering firm was hired to perform this calculation. Cost here was $750. Next Commonwealth Edison required an application for interconnection and net metering. Total cost was $50. My contractor coordinated all of this for me.

So all in all this was not complicated, especially with a contractor who managed the permitting and interconnection details. There was some added cost but it was not prohibitive. There is an opportunity to simplify things even further and there is pending state legislation to address some of these deficiencies. We should feel proud to live in a state that is pretty progressive regarding renewable energy. CurrentlyIllinoishas received a grade of B from an independent study of current state policies regarding net metering and interconnections. If this new legislation is passed,Illinois should move to an A grade in both these categories1. This makes our state a more attractive place in which to live and do business.

Finally I should be eligible to sell RECs (Renewable Energy Credits). This was something I didn’t know anything about until well into the process and it was a pleasant surprise. For every megawatt of energy produced I will own one REC. My system should generate 8 RECs per year. This is a little tricky to explain but a REC is a “certificate” tied to the environmental benefits of a renewable energy system. You might call them the “bragging rights” to clean energy. If someone who is trying to meet renewable energy mandates or goals wants to secure this claim without having a renewable energy system they can buy RECs. While I get the energy and savings, if I sell my RECs I cannot claim the environmental benefits, the purchaser now has that right. But I know these benefits are there and I get all the financial benefits so I’m happy to part with these certificates which may net me in the neighborhood of $200 each.

In the next piece that I will write, I will concentrate on the economics of my system. But keep in mind the benefits I am generating in addition to my personal financial gains. First, I have created a good size job for a local contractor. Second, I am purchasing equipment all of which is manufactured in the USA. This is generating domestic job growth. Third, my energy dollars are staying in this country. Fourth, since my “fuel” is free and not controlled by any company or country I do not face inflationary or fluctuating energy costs or the threat of having this source shut off or held hostage. This is beneficial to national and personal security.

1Freeing the Grid, Best Practices in State Net Metering Policies and Interconnection Procedures, December 2010, Network for New Energy Choices, New York, NY.

The Department of Defense (DOD) is positioned to become the single most important driver of the clean tech revolution in the United States, according to a recent report from Colorado-based Pike Research. The firm estimates annual spending on renewable energy by the DOD will reach $10 billion by 2030. While a significant portion of the amount will be spent on facilities operations, including permanent bases, the majority of the spending will be for mobility applications including portable soldier power as well as land, air, and sea vehicles.

"Military investment in renewable energy and related technologies can help bridge the 'valley of death' that lies between research and development and full commercialization of these technologies," said Pike Research president Clint Wheelock.

The firm estimates that the DOD currently spends approximately $20 billion per year on energy – 75 percent for fuel and 25 percent for facilities and infrastructure. Among the key sectors that will receive significant Pentagon attention and investment over the next two decades are solar power for both permanent bases and temporary facilities; fuel cells for individual soldier power; microgrids for military facilities; and biofuels for military vehicles, particularly the Navy’s “Great Green Fleet” initiative to shift to a largely biofuels-driven fleet by 2016.

The total market for renewable energy for mobile power for forward bases and temporary installations, for instance, is forecast to reach $6.1 billion by 2030. By way of comparison, the total annual expenditure by China on renewable energy for military applications will reach $4.5 billion in 2030. For a free executive summary of the report, click HERE.

It is a common misconception that what is good for the environment will be bad for the economy and vice versa. Nothing could be further from the truth. A strong economy and a healthy environment are inseparable.

We are experiencing a struggling economy with what I see as no solid strategy to correct the situation. Our economy has been moving away from manufacturing and towards services for many years. Financial services as a percent of GDP is at an all time high and higher than what is recommended. I, for one, do not feel secure with an economy that is built around managing other people's money in ever more creative ways. Recently every household's wealth has been negatively affected because of this. And what have we learned and how has our behavior changed as a nation?

Taking tax dollars and throwing them at the problem is not a solution. As well intentioned as this is and as appreciative as we are for infrastructure improvements, this is just a tactic to buy time while a real solution hopefully surfaces before the money runs out. Well the money has run out -- ask the unemployed if they feel the solution has been found.

A basic remedy for a downturn in an economy or, for that matter, a business seeking growth is to find a significant new demand to supply. Sounds simple but it is not. Certain criteria need to be met or we may experience another dot com-like bubble which offers a brief lift followed by an even more painful fall.

Fortunately we have an opportunity with all the right criteria sitting right on our doorstep. Unfortunately it is our assault on our environment and the imperative that we reverse the track we are on that has created this opportunity. We only lack the will and the necessary information. The opportunity is to transition our energy source from outdated, dirty, dangerous, largely foreign, and finite resources to state of the art, clean, safe, domestic, and unlimited resources. Jobs are not lost. They are transitioned and added to.In simple terms the criteria necessary to initiate meaningful economic growth are the following - 1 - 2 - 3

1. A large and growing market.

Energy is used by everyone - it is increasingly used by everyone and considered not a luxury but a necessity - there can be no stronger market than EVERYONE!

I'm sure many more can be listed. A supply with so many negative and undesirable attributes is ripe for replacement. There is an obvious opportunity to generate energy without most of these problems. It is rare in business to identify such an attractive opportunity for improving matters. But current energy sources have very formidable strengths. They have artificially low pricing (see item 3), a strong distribution network, and huge wealth that can be used to influence public opinion and political action. Who hasn't heard the fictional term "clean coal" and been led to believe that it is real?

3. The new alternative needs to be available now.

The good news: New state of the art wind, solar, biomass, geothermal, and hydropower technology is available.

The good news here is that there exist many alternative energy sources without the negative features listed in item 2. New state of the art wind, solar, biomass, geothermal, and hydropower technology is available. But the bad news is that since there is not a level playing field for these technologies to compete on, they are struggling to gain meaningful market share – and that drives innovation and lower prices as well as the associated jobs they create.

Since current energy suppliers do not factor in all environmental impacts into their cost structure (in economic terms this is known as a negative externality) their pricing is lower than it should be which provides them with a huge competitive advantage. These costs do exist but are being transferred to a future time and future payers; our children and grandchildren. The idea of a "carbon tax" or "cap and trade" is an attempt at monetizing some of these negative externalities. A cap and trade mechanism was implemented to reduce sulfur dioxide emissions from power plants, a cause of acid rain. It was highly successful and demonstrated how market forces can achieve cost effective environmental protection.

The EPA has published a series of studies that detail the costs and benefits of the Clean Air Act since 1970. It is estimated that we will spend $65 Billion in 2020 to address air pollution related effects(1.). How less competitive would fossil fuels be if these costs were factored in (and these are not the only ones). Regarding CO2, another common by-product of fossil fuels, the Stern Report puts the cost of no action on the mitigation of climate change at 5% to 20% of global GDP. This is unimaginable. At a minimum, with proper action, we face a cost of 1% of global GDP due to the damage already done according to this report. Each tonne (metric ton or 2,205 pounds) of CO2 we emit causes damages worth at least $85( 2.). Keep in mind the US alone emits over 6 Billion tonnes of CO2 per year. Each gallon of gas emits some 20 pounds of CO2. These are some of those external costs which are being ignored by the producers to their gain and to everyone else's loss. These costs are being or will be paid by us but unbundled from the products that are the cause. They may show up in tax bills or health care costs or in other ways. This is unfair and deceptive.

Addressing our energy need is clearly a huge environmental protection imperative and a great economic development opportunity. It's ironic that certain political talking heads and elected officials who preach fiscal responsibility and job growth so actively oppose this. It mystifies me that conservatives reject anything related to protecting the environment as if they are immune to the perils and the costs of such a short-sighted approach. Everyone benefits from a healthy environment. It is not a liberal policy. It is a human policy.

This has been a macro economic view and opinion of the current economic and environmental situation and the basic steps needed to improve it. In upcoming articles I will describe a more micro or street level view of these principles in action. Specifically, I am investing in converting my home to solar generated electricity. What I am experiencing is a win-win-win-win scenario. I am supporting domestic job creation, my energy dollars are staying in the USA, I have increased my wealth and am protected from wildly fluctuating energy prices, and I am protecting the environment. Please join me on this journey.

(1.) U.S. Environmental Protection Agency, Office of Air and Radiation, The Benefits and Costs of the Clean Air Act from 1990 to 2020, Summary Report, March 2011.(2.) Stern, Nicholas, The Stern Review of the Economics of Climate Change, 2006, HM Treasury, London.

*Peter Gorr lives in Palatine, IL and is a husband, parent, and grandparent. He is a retired business executive and holds a MBA from the University of Chicago in Marketing and Statistics. He is on the Executive Committee of the Sierra Club NW Cook County Group and an active member of Illinois Solar Energy Association.

The ELPC conference call will be at 9:30 am Central Time Friday. We will summarize how the IPA Procurement plan was modified to include distributed SRECs and we'll answer any questions you may have. The dial in details are:

Call in number 866-394-4146
Participant Pass code 11188695

Wednesday evening (9/28) the IPA released its proposed procurement plan to the ICC. The plan included a process to procure SRECs from distributed solar energy systems and reflected our recommendations on how the program could be structured. It also included our recommendation for a workshop process to design program details with input from a broad range of stakeholders.

This is great news and it would not have happened without the comments that many of you filed with the IPA. However, this is only the beginning of the ICC's review process and it will take a lot of work to make sure the plan is approved by the December 27th deadline.

The ICC's briefing schedule begins on Monday, when objections to the plan are due. ELPC will intervene in the case and file support for the plan. We anticipate that there will be objections and that we will need to stay actively involved to defend the proposed distributed SREC procurement program. There will be an ongoing opportunity to file public comments and we encourage all of you to do so. We will provide additional information on tomorrow's call.

There was a solid response from supporters of a distributed solar program – this is clearly an issue that many residents and businesses care about in Illinois.

As the next step in the process, the IPA will submit the FINAL Procurement Plan to the Illinois Commerce Commission (ICC) next Wednesday, September 28th. At that point, the ICC will initiate a formal proceeding to seek additional comments and solicit input about the controversial issues. This process will last until the end of December, at which point they will issue an order either approving or modifying the plan.

We do not know yet whether the Final Plan will include a distributed solar procurement. Either way, it will be an uphill battle to obtain ICC approval, and generating additional public comments will be essential.

Please educate your legislators about how quickly this program closed due to lack of funding. The speed of allocation demonstrates that people are ready to install solar and wind, and jobs could be supported if the rebate were better funded.

17 Sep 2011 3:39 PM |
Anonymous

Solyndra, the California-based solar-panel maker, recently filed for bankruptcy. This event was used by the media to announce the end of solar technology, which couldn’t be farther from the truth. The solar industry is thriving more than ever before.

The attention is understandable, as Solyndra received a $535M loan from the Department of Energy in 2009. In the scheme of loan guarantees, though, this only accounted for 1.2% of the total $38.6B loan guarantees issued by DOE (read more). And being the only of these companies to file for bankruptcy, the attention should not be focused on the energy-loan guarantee program. Solyndra remains the exception to the rule (read more).

With that being said, what happened to Solyndra? Simply put, solar is getting cheaper and cheaper. Specifically, silicon is getting less expensive. Companies, such as Solyndra, whose business models require a higher price, are unable to keep up with the competition (read more). When Solyndra began, silicon was the dominant raw material for PVs. As the solar market here and in Europe took off, there were silicon shortages, and it became expensive. As solar-grade silicon was never demanded before in such high quantities, the supply did not yet exist and prices went up (read more). Most solar companies invested their time and energy into alternative solar methods. Solyndra , among other companies such as Nanosolar, Miasole, HelioVolt, received millions of venture capital dollars to look for other non-silicon solar methods.

As one would expect, silicon prices have since tumbled. Therefore, Solyndra’s $2/Watt technology was unable to compete against $1/Watt silicon PV. In fact, the solar industry has reduced the cost of solar by 70% since 2009! This increase in competition and reduction in cost proves that solar is a growing market. It is more affordable than ever for consumers to invest in solar. “As of June, California utilities have signed over 8 GW of solar contracts…half of which are below the price of new natural gas generation. That’s right – “gigawatts of solar cheaper than the fossil fuel alternatives.” (Read more). While Solyndra closing is not a positive event in itself, it represents the growing market of solar power and the renewable energy field! Follow us on Twitter and Facebook to stay up to date on Solyndra and other renewable energy news!

The Born's (site 32) are ready for you to visit their home on October 1st as part of the 5th annual Illinois Solar Tour. Their home is equipped with a 5 kW PV array to provide the majority of their electricity needs and to charge their new Chevy Volt.

1. The biggest change to the program is that the per watt incentive limits for solar PV and wind energy projects have been decreased, as has the maximum rebate amount. Rebates will be limited to no more than $2.25/watt for solar photovoltaic systems and $2.00/watt for wind energy systems purchased by residential and business entities, and $3.75/watt for solar photovoltaic systems and $3.25/watt for wind energy systems purchased by public sector and non-profit entities. Otherwise, the rebate is still based on 30% of total cost for homeowners and businesses and 50% for governmental and non-profit entities, with a maximum rebate of $30,000.

2. Another provision (Section 2.3.3) encourages that the applicants submit a report by a certified wind site assessor for wind projects but does not require that it be submitted.

3. We request information on installers/developers related to whether they are a minority business in the application.

4. We also added Appendix B to provide a timeline of the rebate process and to provide a checklist of what to provide with application.

Applicants from FY 2011 who did not get considered for a rebate and are still interested in a solar or wind rebate this year, must reapply using the new form. All applicants will be considered on a first come, first serve basis.

If you have any questions with regards to the new guidelines and application form, please email or call Wayne Hartel.

The IPA’s draft plan proposes to buy all SRECs (solar renewable energy credits) needed to comply with the Illinois Solar Carve Out through a competitive auction designed with large, utility-scale projects in mind. If past procurements serve as an example, participation requirements will be too complex and transaction costs will be too high for distributed solar developers and owners to participate. There is no separate procurement program proposed for small and mid-size rooftop and ground mounted systems. Without a separate procurement program, it is likely that our state’s very aggressive Solar Carve Out (which will require output from about 600 MW of installed solar by 2015) will be met entirely with SRECs from utility-scale solar projects, some located outside of Illinois.

ELPC strongly encourages you to submit comments on the 2012 Draft Procurement Plan and tell the IPA that Illinois needs a solar procurement program that will drive real expansion in Illinois’ solar industry. A template is attached to provide some sample language and comments, but unique and personal comments will carry more weight than a standard form letter, so please make sure to modify this so that it reflects your own voice. Please abstain from using these comments to promote any single project or individual agenda, but focus on the broad policy objective.